Big Tech Reports Lower Tax Bills Than Trump’s Big Beautiful Bill

00:00 George

This is shaping up to be a banner tax year for tech giants like Amazon, Meta and Alphabet. Yahoo Finance’s Washington correspondent Ben Worskal joins in now with details. Ben.

00:15 Ben

Yes, George. So as we’ve seen in the last few weeks of big tech earnings, we’ve seen some full 2025 tax bills in evidence as well as at least three big players in annual reports with clear trends and evidence, which is a downward tax bill for 2025 compared to 2024. This is the kind of confluence we were talking about. One of Trump’s big beautiful bills includes business-friendly provisions that he signed last summer and will go into effect through the entire tax year 2025. The numbers are quite remarkable. It’s billions of dollars less on their tax bills. Amazon’s bill will drop from $9 billion in 2024 to about $1.2 billion in 2025. Meta is the same as last year at 2.8 billion in 2025 from 9.6 billion in 2024. These are tax credits that Trump signed into law for things like property depreciation, new factory construction, and research and development. Some of them are deferred. It is important to note that instead of cutting these taxes completely, it spreads them out so that they are less spread out. So in other words, you take this deduction forward, so there could be bigger um um tax bills down the road for these companies. But for now, it’s a clear type of benefit for the bottom line of these companies in the current context. And you’re hearing that a lot in their messages to shareholders.

02:00 George

I’m curious about the messages, Ben, how do you think that story will play out with the public? Like if you were one of these big tech companies, would you think, well, I’m probably going to be on the receiving end of some heat, some criticism here?

02:16 Ben

Yes, absolutely. So here is the history of this summer and the criticism these companies are getting because of these types of issues. Amazon paid virtually zero dollars in federal taxes in 2017 and 2018 and received a lot of attention during that time. A very similar situation here where they use research and development credits, all these different government credits, the way these companies have designed these tax credits. They don’t do anything bad here. They are using the rules because they are set up to reduce their tax bill. And you’ve already seen some kind of pre-empting of the criticism that could potentially come here. Amazon had a long statement around this Umm that is fundamental to making the point that we sort of have the rules set by Congress and we’re playing by those rules. They also note that this is due to their investment. They are estimated to have invested $340 billion in the US economy last year. So they are taking credit. On the flip side, you’re also seeing some touting of this. This again is a boon for the bottom lines of these companies especially this year. Meta’s CFO was talking about this recently in his earnings call, saying that this is a substantial tax savings for the company right now. So it’s that they’re trying to do both sides of it and I think you’ll see a lot more of that this year as we see more companies in full tax situations.

03:47 George

And finally, Ben, before we let you go, we’ve got that job report, my friend, tomorrow. Curious, how do you think the White House is preparing for this? What messaging is going to happen there?

04:02 Ben

Yes, we saw a pretty significant pre-battle of sorts on these jobs numbers from the White House economic team before they came out. Essentially, these numbers may be lower than what the market wants, but that’s okay and you shouldn’t take them as a leading indicator of the economy. Kevin Hassett, director of the White House National Economic Council, said markets shouldn’t panic, explaining what he thinks will be a smaller number than many expected. The overall case being made here is that there are other factors that may be putting downward pressure on the number of jobs here, but this is not an indicator that the overall economy is slowing down. They cite AI productivity, basically the economy’s um productivity there, as well as Trump’s ongoing deportation efforts as key factors here that could lower this number, but again, shouldn’t change the economy as a whole. Peter Navarro was also emphasizing this message and he made the case that we should rethink what constitutes a good job report or not. His case is that $50,000 or 50,000 jobs is a good number to keep up with population growth because basically the US economy is deporting so many Umm immigrants at this point. After all, what economists are projecting is a report in the neighborhood of 70,000 new jobs added last month. But the range is really wide there. So I think we’re going to have an unexpected jobs response tomorrow, both politically and economically.

05:40 George

All right, Ben. thank you Appreciate it.